by Alyssa Oursler | December 19, 2013 9:12 am
Netflix (NFLX) has been a roller-coaster in recent years. Shares of NFLX stock took one ugly tumble in mid-2011, and didn’t regain momentum until the latter half of 2012.
That little bit of momentum went a long way in 2013, though. Netflix stock has gone nowhere but up, tallying gains of almost 300% and putting market-beating runs from tech giants Google (GOOG), Amazon (AMZN) and Facebook (FB) to shame.
Of course, at least some of that run has been fueled by shorts realizing just how wrong they were about NFLX stock and rushing to cover their positions. In fact, the tally for shares of Netflix stock sold short has been carved in half since the start of the year.
So what sent NFLX soaring and shorts scrambling in 2013? The biggest one-day moves are marked on the accompanying stock chart, while the Netflix news that caused the moves is explained below.
1. Jan. 24: The first batch of big Netflix news came when fourth-quarter earnings were released in late January. NFLX shocked everyone by reporting earnings of 13 cents per share vs. expectations for a 13-cent loss. The surprise profit came thanks to solid revenue growth and strong subscriber growth, and had NFLX stock investors smiling.
Aftermath: The good Netflix news helped squeeze NFLX stock higher by a whopping 42%. And the Netflix stock gains continued the next day too, with shares up another 15%.
2. April 23: The next earnings report from Netflix didn’t disappoint, either. Around three months later, NFLX stock enjoyed another post-earnings rally that sent shares to their highest level since September of 2011. The most exciting Netflix news this go-round? The streaming video service added more than 2 million U.S. subscribers in the first quarter of fiscal 2013. As a result, analysts upped their estimates and price targets for NFLX stock, and investors rushed to grab more shares.
Aftermath: Shares of Netflix stock jumped 24% on the news, coming on top of a 7% climb for NFLX the day prior.
3. May 28: Netflix stock had a rough Monday morning in late May, though, and two words sum up why: Arrested Development. The new Netflix Arrested Development season — which brought back the show after its cancellation in 2006 – debuted on Sunday, May 27. And while it’s not clear whether mixed reviews, high expectations, or a simple sell-the-news reaction was to blame, it was clear that NFLX stock investors weren’t impressed.
Aftermath: Netflix stock tumbled 6% on Monday — a notable drop considering there were only seven trading days this year where NFLX fell more than 4%. The drop also capped off a slight slump for Netflix stock; shares shed 12% over the course of seven trading days.
4. June 17: Netflix news about original programming sent shares in the other direction a few months later, though. NFLX stock jumped after the company announced a deal with DreamWorks (DWA) to create 300 hours of original animated programming based on properties like Shrek, Kung Fu Panda and Madagascar. The first series from the partnership should begin streaming in 2014.
Aftermath: NFLX stock added 7% on the news, and rode that momentum to 25% gains over the course of the next month.
5. Oct. 14: Netflix stock investors were also pleased in the fall when the company struck its first deal with a major Hollywood studio for a new series. NFLX announced it would be teaming up with Sony (SNE) to create a new psychological thriller. The Netflix news was notable because all previous series were either distribution deals or created by smaller studios.
Aftermath: NFLX stock jumped a solid 7% after the deal is announced.
6. Oct. 21: Netflix earnings once again propelled the stock higher just a week after its previous surge. NFLX stock jumped after the company posted “robust growth and a rosy outlook,” as CNN Money put it. Earnings beat the Street’s expectations, while NFLX subscriber growth continued to impress.
Aftermath: Netflix stock jumped as much as 10%, while NFLX ended the day with a 6% gain in the books.
7. Oct. 22: Those gains were erased soon after, though, and one man was to blame. After the earnings fireworks fizzled out, the big Netflix news was that billionaire activist investor Carl Icahn dumped half of his stake — a move that certainly rattled a good number of NFLX stock fans.
Aftermath: Netflix stock sank 9%, making for the biggest single-day drop NFLX suffered all year. But Netflix took the stepback in stride, and has gained 22% since then vs. an 8% climb for Nasdaq. Now, NFLX stock is sitting at all-time high just under $370.
As of this writing, Alyssa Oursler did not hold a position in any of the aforementioned securities.
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